[Book Review] A Visionary System for Managing Revenue Growth

Source:  John Willey & Sons, Inc.

"Revenue operations" has been a notable topic of conversation in the B2B world for the past few years.

Interest in revenue operations has been increasing because astute business leaders have recognized that revenue growth results from a combination of several interdependent activities that should be treated as components of a larger revenue generation process. The objective of revenue operations is to manage the entire revenue generation process holistically.

There is a fair amount of literature about some aspects of revenue operations. For example, much has been written about the growing number of companies that have created a C-level "chief revenue officer" position to manage most or all of the company's revenue-generating functions.

Until recently, however, most of the published literature has not addressed revenue operations in a comprehensive way. A book by Stephen G. Diorio and Chris K. Hummel attempts to fill this gap. Revenue Operations:  A New Way to Align Sales & Marketing, Monetize Data, and Ignite Growth (John Wiley & Sons, Inc., 2022) provides a detailed discussion of revenue operations as a holistic growth management system.

Stephen Diorio and Chris Hummel are well qualified to write about revenue operations. Diorio is the Executive Vice President, Growth Strategy at Green Thread, a B2B practice focused on helping companies achieve more sustainable, scalable, and profitable revenue growth. He is also a Senior Fellow at the Marketing Accountability Standards Board and the Wharton Customer Analytics Initiative.

Chris Hummel is the President of Green Thread and has been a two-time Fortune 500 CMO. He has also led sales, marketing, product, and digital teams at world-class companies like SAP and Oracle.

What's In the Book

Revenue Operations is structured in four parts. Diorio and Hummel use the Introduction and Part I (Chapters 1 and 2) to lay out the business case for a new approach to managing revenue growth, and they pull no punches when describing the current approach.

". . . organizations too often treat growth like a disconnected, functionally driven art form rather than the interdisciplinary science it should be. The core revenue-facing functions - Marketing, Sales, and Service - all operate in silos. Managers optimize the parts . . . while coordination between the three is episodic, temporary, and heavily influenced by the personalities involved . . . Even when this approach works, managers generally celebrate only the fact that growth happened,, since they usually cannot explain why."

The authors argue that companies need a new system for managing the revenue cycle, and they call that system "Revenue Operations."

According to Diorio and Hummel, Revenue Operations has two components - a management system that aligns the people in a company's revenue teams, and an operating system composed of technology, processes, and data.

In Part II of the book (Chapters 3-5), the authors identify and discuss the six "pillars" of the Revenue Operations management system. Chapter 5 discusses the three most common leadership models used for Revenue Operations.

• The Tsar - The company consolidates decision-making and operational control of all revenue-related functions under one leader.

• The Federation - The company creates rules of engagement among existing functional leaders to manage revenue growth activities.

• The Chief of Staff - The company merges marketing operations, sales operations, and similar roles into one unit that supports the marketing, sales, and service functions. This new unit is led by one Revenue Operations executive.

Part III of Revenue Operations (Chapters 6-10) discusses the nine building blocks of the operating system for Revenue Operations. According to Diorio and Hummel, this operating system combines technology, data, processes, and revenue teams to enable a company to generate consistent, predictable, and scalable growth.

In Part IV of the book (Chapters 11-14), the authors discuss the steps business leaders can take to begin implementing Revenue Operations, and they provide a framework for measuring the financial value of the Revenue Operations commercial model.

My Take

Revenue Operations is an ambitious book that addresses an important, broad, and complex topic. Diorio and Hummel deserve a great deal of credit for providing a comprehensive and systematic discussion of the concept of revenue operations.

Revenue Operations is a challenging book to read. It reads like a college textbook on an advanced academic subject. Most of the difficulty is due to the subject matter, although the authors tend to become repetitive in several places.

Diorio and Hummel acknowledge that their Revenue Operations "model" is nothing short of an entirely new system for managing revenue growth. Therefore, implementing this model will require business leaders to make several far-reaching organizational changes. And that will be challenging.

It's also clear that the Revenue Operations model envisioned by Diorio and Hummel depends heavily on several sophisticated technologies. For example, the authors' description of the Revenue Operations "operating system" in Part III of the book is filled with references to "artificial emotional intelligence," "AI-enabled service automation," "AI-enabled contactless selling innovations," "AI-driven simulation-based tools," "algorithmic segmentation, targeting, and coverage modeling," and many other similar capabilities.

This heavy reliance on sophisticated technologies will probably limit the number of companies that can fully implement the authors' Revenue Operations model.

Even with these caveats, Revenue Operations is an important book that business leaders responsible for revenue growth should read. Diorio and Hummel have provided a visionary approach to managing revenue growth, and that in itself has significant value.